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Capital Introductions for Alternative Asset Managers & RIAs
Is Your Strategy Good Enough to Warrant Introductions to 100,000+ Accredited Investors and 10,000+ Financial Institutions?
As you probably know, Adagio Group is a boutique investment bank and quant-driven asset management firm…
On the buy side, we measure the risk-adjusted performance characteristics of alternative asset managers, optimize their strategies, and financially engineer the optimal private structures to wrap them.
On the sell side, we distribute those private structures (either directly or indirectly) to the 100,000+ accredited investors and 10,000+ financial institutions (including RIAs) in our ecosystem providing them substantially better risk-adjusted investment performance than what’s otherwise available.
What is required to access that level of distribution?
The first thing every responsible capital markets participant needs—whether you’re a passive investor or an asset manager—is to know where you stand:
What are your true expected returns?
What is your true risk exposure? (And no, risk is not standard deviation.)
What is the liquidity quality of your investment or portfolio?
We accurately measure all three.
Investors have the option to invest in anything—regardless of asset class. How does a rational investor make allocation decision? They choose the investment with the highest return and the least amount of risk that has liquidity characteristics consistent with their time horizon. Everything else—including stories around asset class—is just an obfuscation of what really matters.
When you’re raising money, you’re taking responsibility for your investors’ life savings; it’s not just about how much money you can make from the structure. You have a moral and ethical responsibility to know—with the greatest accuracy possible—what risk you’re exposing them to. (The denominator of the Kapsos form of the Omega Ratio precisely and discretely measures risk, which is the probability of loss weighted by the expected degree of that loss. For any risk-adjusted performance measure to have meaning, the data being analyzed must encompass a minimum of one complete market cycle with a periodicity consistent with trade frequency.)
What if your current strategy has a limited track record?
Virtually any strategy can be rigorously backtested to accurately measure its risk-adjusted performance as if it’s actually been running for decades. To do so, the strategy must be distilled into a comprehensive set of objective rules, then the relevant actual historical data (looking back to at least January 2007, preferably earlier) must be researched and plugged into the variables associated with each of those rules. Historical period returns are compiled based upon those variables in what you might think of as a pro forma in retrospect. Those returns can then be statistically analyzed to accurately measure the strategy’s risk-adjusted performance. (As you can probably deduce, this algorithmic approach to theoretical track record construction and backtesting does not allow for cherrypicking or data fitting.)
As a matter of fact, we almost always find opportunities to optimize our clients’ existing strategies, which effectively creates new strategies that must be backtested. So theoretical track record construction is not just for the newbies.
Once we’ve measured your risk-adjusted performance and optimized your strategy, we’ll introduce you with your strategy’s risk, return, and liquidity characteristics to our following of over 100,000 accredited investors and over 10,000 financial institutions and RIAs.
The result is that allocator interest is tied directly to the performance of your strategy… the better your strategy, the more interest it will garner. It’s a merit-based dynamic, which is the best anyone could ask for.
What if you don’t have a strategy?
We can help you create a fund of funds, and if appropriate, we’ll serve as its portfolio manager. In other words, we’ll source the best strategies and asset managers in the market for you and construct your fund’s portfolio to meet its risk, return, and liquidity mandate, then introduce your fund of funds with the risk-adjusted performance characteristics of the portfolio we construct for it.
This is particularly valuable for RIAs as it provides them an institutionally-managed alternatives portfolio under a single packaged product with exponentially better performance than what’s otherwise available. The fund of funds allows RIA clients to overcome the very high minimums of each individual alternative investment by aggregating their capital through one entity. In turn, the well-earned fees the fund of funds generates for the RIA should double to triple the firm’s revenue without acquiring a single additional client. Further, the RIA is now differentiated by offering objectively better products and services than its competition and communicating its offerings in intuitive terms the retail market is instinctively seeking.
What if you’re a retail investor with no interest in running a fund?
We’ll connect you with a qualified RIA who can provide you access to the level of performance we’ve been discussing.
To get introduced to the 100,000+ accredited investors and 10,000+ financial institutions in our ecosystem, take The Shadow Banker’s Secrets: Investment Banking for Alternatives Masterclass (upgrade your free book order) to learn the technical fundamentals you’ll need, then schedule your private consultation.